Bitcoin miners are increasingly migrating to other territories that offer a surplus of hydroelectric energy, including British Columbia, Quebec, Manitoba, Alberta, and Labrador.
According to a report published April 15 by the National Post, the government of Canadian province Labrador is planning to host more server farms for Bitcoin by implementing energy incentives in an effort to draw in more crypto miners.
In response to the outstanding requests for service from data centre processors, Quebec has similarly considered providing energy incentives by offering lower energy prices but subsequently withdrew its plan due to the overwhelming demand for increased power from Bitcoin miners.
Recent reports also indicated that Chinese Bitcoin mining companies are also considering relocating to other territories to find a more inexpensive energy source, some of which have already migrated to Quebec and are currently being charged standard business hydroelectric rates.
As it stands, forestry and fishery companies have already exhausted much of the resources of Canada’s rural and northern regions, and are now exploring new options to steer their economies.
At present, Labrador possesses an abundance of renewable hydroelectric energy, including two huge power-generating hydroelectric dams, Muskrat Falls and Churchill Falls. In a resource-driven economy, large hydroelectric dams might make more sense. However, given the remote province’s already depleted resources, governments are beginning to find it difficult to justify the massive expenses that come with maintaining such facilities, including the mortgage for Labrador’s Muskrat Falls project, making these dams more of a financial and environmental liabilities.
According to the provincial government of Labrador, constructing Muskrat Falls costs roughly $12.7 billion CDN, while maintaining operational expenses costs approximately $726 million CDN during its first year alone.
While the government has already proposed keeping its electricity rates at 13.5 cents CDN per kilowatt hour, an anonymous Bitcoin miner argued that the current rate still won’t cut it for smaller farms, as the largest crypto mining firms can purchase energy for 3 to 4 cents USD.
However, over the last year, there has been a significantly rising demand from mining firms, according to the Labrador Public Utilities Board.
As indicated in a previous report published last year by Canadian daily newspaper The Telegram:
“Data businesses are expressing an interest and willingness to ‘take what’s available,’ [an anonymous official] said, and are requesting new transmission infrastructure to make more power available to them in Labrador, locating wherever the feed of power is possible. They just want low power rates.”